AriseCoin: Bitcoin scam operators pay millions in fines

When the last boom phase of Bitcoin was just ebbing away, the SEC began to grab hold of the ICO scene. In January of this year, the SEC froze the business operations of AriseCoin for the time being. On 12.12., the authorities announced the amount of the fine and further criminal consequences.

At the beginning of 2018, when the air was escaping from the Bitcoin bubble again, scam messages were almost the order of the day. So was the ICO with the promising name AriseCoin: the company pretended to be “the world’s first decentralised bank”. With an attractive white paper and social media campaign, the operators raised a total of 600 million US dollars. The problem: there was neither an approval nor a decentralized bank. In short, another scam that rode the Bitcoin wave.

Bitcoin and cryptosoft assets frozen immediately

So it also happened that the SEC immediately froze the cryptosoft assets of the two operators. Among them were Bitcoin and cryptosoft deposits. Now, just under 11 months later, the US Securities and Exchange Commission published its ruling on 12 December. In a press release, it announced that the two operators of the ICO had been sentenced by the federal court to pay almost 2.7 million US dollars. Furthermore, they may no longer “act as officers or directors of corporations or participate in future offerings of digital securities”.

Accordingly, the crypto trader Chairman of the Fort Worth Regional Office of the SEC expressed outrage:

“Rice and Ford lied to AriseBank’s crypto trader investors by promoting the company as one of the first decentralized crypto trader banks with its own crypto currency for customer products and services. The […] digital stock exchange will prevent Rice and Ford from committing another cryptoasset-based fraud.”

Without admitting or denying the allegations, the two operators Jared Rice and Stanley Ford accepted to pay a $2.5 million fine. All in all, the operators were quite accommodating. The press release goes on to say so:

“They [the operators and the SEC] also agreed on a lifelong ban on serving as officers and directors of public companies and participating in digital securities offerings and a permanent ban on violating the anti-fraud and registration provisions of federal securities laws.